What the property costs you after tax
Gross yield is a marketing number. This models the three things that actually decide an Australian investment: depreciation, negative gearing at your marginal rate, and the capital gains tax bill on the way out.
Depreciation
Second-hand residential property — plant & equipment isn't claimable, capital works is.
Based on an estimated building cost of $323,000 and 24 years of the 40-year capital works period remaining. A quantity surveyor's schedule will produce a higher, defensible number.
After-tax cash flow — negatively geared
- Cash flow before tax
- -$22,540/yr
- Taxable rental result (after depreciation)
- -$21,615/yr
- Tax offset at 39% marginal rate
- $7,967
Capital gains tax on exit
- Cost base (less capital works claimed)
- $831,475
- Gross capital gain
- $192,275
- Taxable gain after 50% discount
- $96,138
- Estimated CGT payable
- $41,985
- Net sale proceeds after CGT
- $981,765
Selling costs assumed at 2.5% of the sale price. Depreciation you claim reduces your cost base, so it shifts tax to the exit rather than removing it — an effective CGT rate of 21.8% on the gross gain here.
PortfolioIQ applies these figures to every property you own.
General information only, based on 2025–26 resident tax rates plus the Medicare levy. It is not tax, financial or legal advice, does not account for land tax, surcharges, trusts, companies, SMSFs, prior-year losses or non-resident status, and should be confirmed with a registered tax agent.